The Non-Manufacturing Index (NMI), which measures activity in the US service sector, jumped to 58.6 percent last month from 56 percent in July, the Institute for Supply Management (ISM) said on Thursday in its monthly survey, reports a news agency.

The NMI survey covers all sectors outside of manufacturing. A reading above 50 percent indicates expansion of the service sector. The August reading is the highest since January 2008 when the figure was initially compiled.

The readings indicate new orders, a signal of future business, which rose by 2.8 points to 60.5 percent in August, while the survey's employment component advanced 3.8 percentage points to 57 percent.

A total number of 16 industries reported growth last month, including construction and retail trade, while two other industries including mining reported contraction. The NMI is closely watched because the service sector accounts for about 90 percent of the US workforce and is a key indicator for the overall health of the economic recovery.